Listed infrastructure investor Infratil has had a big lift in the value of its renewable energy investment Longroad Energy as the US based company attracts new investment.
US dollars. File photo Photo: 123rf
German company Munich Ergo Asset Management (MEAG), part of the giant Munich Re insurance group, has agreed to invest $US300 million into Longroad for a 12 percent stake, with Longroad's valuation rising to $US2 billion.
As part of the broader deal Infratil and the NZ Superannuation Fund will each invest $US100m into Longroad, although their stakes in the firm will be diluted from 40 percent to 37 percent.
Infratil's chief executive Jason Boyes said the company was "extremely happy with this outcome".
"We remain very optimistic about the opportunities and outlook for Longroad and are pleased to be increasing our investment as part of this transaction."
The value of Infratil's stake in Longroad has increased from $US220m in March to $US798m as at June and then $US927m at the end of the deal.
"This transaction, alongside the sale of Vodafone New Zealand's passive mobile towers announced in July, continues the trend of private market valuations of infrastructure assets for like-minded, long-term investors exceeding listed market consensus," Boyes said.
The Super Fund was similarly upbeat about the Longroad investment and value gain, with its head of external investments and partnerships Del Hart calling it one of the Fund's most successful investments.
"In line with our long-term, partnership approach to infrastructure development, we are pleased to both welcome MEAG as a co-investor and contribute more capital ourselves ... we look forward to seeing it (Longroad) continue to deliver both strong financial returns and positive environmental and social outcomes."
Longroad is involved in renewable energy projects in the US and wanted the $US500m extra capital to fund future projects which include large solar power and storage.
MEAG said in a statement that its investment in Longroad was part of its net-zero climate commitment.
Wellington based investment firm Morrison & Co, which also manages Infratil, will also benefit from the deal gaining more than $100m in an incentive fee for the increase in the value of the Longroad investment.